Michael Heinrich on Reading Capital and Marxist Theory

Class Unity recently spoke with Michael Heinrich about how to read Capital, why Marx’s project is a critique of political economy, and how that critique challenges the appearance of capitalism as a natural social order. Heinrich is the author of An Introduction to the Three Volumes of Karl Marx’s Capital and Karl Marx and the Birth of Modern Society, the first volume of his intellectual biography of Marx. In the discussion, he explains the monetary theory of value, abstract labor, the transformation problem, and the relationship between scientific analysis and political education. The conversation also addresses financial crisis, central banking, reform and anticapitalist strategy, technological determinism, the contemporary left, and German politics. The original Class Unity video contains the complete recorded discussion.

Class Unity: Welcome to today’s discussion. Our guest is Michael Heinrich, a scholar and author of numerous books and articles devoted to Marx’s theory. His introduction to the three volumes of Capital is an invaluable resource for anyone trying to work through Marx’s economic writings, and the first volume of his multivolume biography, Karl Marx and the Birth of Modern Society, is available in English. Michael Heinrich, thank you for speaking with us today.

Michael Heinrich: Thank you for the invitation. You asked me to begin with some introductory remarks about reading Capital. I know that you recently completed a reading group of fifteen or sixteen sessions, and I was a little surprised by the order of the readings. You began with chapter four, divided the first chapter on the commodity among several later sessions, and introduced other economists near the beginning.

When I organize reading groups, university seminars, trade-union seminars, or even a two-day introduction to all three volumes, I try to remain closer to the order of Marx’s own presentation. My preference is to read as much of the original text as possible and only afterward introduce competing approaches for comparison. When time is limited, I would rather select less material and examine it in greater depth.

Even in a short course, I would devote forty or fifty percent of the available time to the first two sections of volume one: commodity and money, followed by the transformation of money into capital. These sections provide the foundation for everything that follows. It is better to omit some later themes than to pass too quickly over this beginning.

I also stress the distinction between Marx’s work and what I call worldview Marxism. There is a tradition of transforming Marx’s various approaches into a comprehensive worldview supposedly grounded in a philosophy called dialectical materialism and a theory of history called historical materialism. Neither expression appears in Marx’s writings. Engels used the term “historical materialism” casually late in his life, but not in the later sense of a closed theory capable of answering every imaginable question.

It is important to distinguish what we actually find in Marx from what later traditions attributed to him. The construction of an all-encompassing worldview is dangerous. Many parties that called themselves Marxist, socialist, or communist used it as an instrument of domination: the party leadership possessed the correct view derived from Marx, while critics were treated as enemies or as people who were simply uninformed. Discussion then became unnecessary because the official worldview had already supplied the answer. These tendencies contributed both to disastrous left-wing policies and to a disastrous culture of avoiding genuine debate.

This is therefore not merely a philological question about what appears in Marx or which edition we should use. It is a political question about how we discuss matters and which matters remain open for discussion. My approach to Capital is to come as close as possible to Marx’s text rather than fitting it into a ready-made interpretation.

The structure of a reading group matters because Marx’s purpose cannot be reconstructed simply by selecting isolated passages on predetermined topics. One can certainly ask what Marx says about a particular issue and collect useful observations from different places. But Capital was not intended as an alternative textbook of political economy. It is a critique of political economy: a scientific critique of its categories and also a critique of the way in which capitalist society presents itself to us.

We tend to perceive capitalism as the natural and rational order of economic life. Marx tries to undermine that perception. This naturalization is not merely the product of manipulation or misleading textbooks; it is an appearance that capitalism itself spontaneously produces. One can learn a great deal from Marx about exploitation, crises, credit, and other particular subjects, but his general critique of capitalism’s apparent naturalness is, for me, perhaps the most important lesson. Reading the architecture of Capital carefully is necessary if we are to grasp it.

Class Unity: We agree that readers should not approach Capitalwith ready-made assumptions. Yet the books are long, difficult, and demanding. Once we understand Marx’s mode of presentation—beginning with the commodity and unfolding the relations that it presupposes—can we extract an intelligible theoretical core for beginners? Every introductory course must make cuts, as your own book necessarily does. If we are speaking to working people and want to explain capital, why not begin with the concept of capital itself?

Michael Heinrich: Of course we can and must select material. My introduction treats volume two very briefly and relegates landed rent, from volume three, to a few lines in a footnote. Someone else could reasonably argue that landed rent deserves more attention. There will always be debate among readers of Capital about what is indispensable and what can be omitted.

I agree that we need shorter routes for beginners and for people who do not want to spend two years reading all three volumes. But we must still respect some basic constructions. Marx’s sequence of chapters and concepts is neither accidental nor mainly pedagogical. The concepts are strongly interconnected.

The first three chapters on commodity and money contain matters that remain fundamental to everything later. In the second subsection of chapter one, Marx discusses the double character of the labor represented in commodities. “Represented” is important; “embodied” is, in my view, a misleading translation. Marx himself calls the double character of labor the crucial point for understanding political economy. If that judgment is correct—and there are good reasons to think it is—then readers must encounter it before moving to capital.

That is why I would reserve at least forty or fifty percent of a shortened course for commodity and money and for the transformation of money into capital. Afterward, we can debate which later sections deserve more or less attention. But those opening sections are indispensable.

Class Unity: We worry that abandoning worldview Marxism might also mean abandoning political Marxism, Leninism, and the revolutionary tradition. Historically, works such as Anti-Dühring were more accessible to workers than Capital, and ideas such as the dictatorship of the proletariat seem to belong precisely to a political worldview. How do we criticize worldview Marxism without marginalizing Marx’s political writings or severing ourselves from the history of socialist movements?

Michael Heinrich: It would indeed be a disaster to abandon political Marx. But I do not see the strong connection between political Marxism and worldview Marxism that the question presupposes. Marx’s many shorter political texts often struggle against precisely the kind of closed outlook I am criticizing, although he did not use my terminology.

We have two tasks. First, we must understand the role that worldview Marxism played in the history of working-class parties. When it emerged in the late nineteenth century, it answered a real need rather than merely expressing a conspiracy among party leaders. The working class, especially in Germany, was excluded from bourgeois society and began constructing institutions of its own: workers’ sports clubs, chess clubs, singing societies, and an entire counterculture. Conservative middle-class families might display a portrait of the emperor in the dining room, while working-class families displayed a portrait of a social-democratic leader. A proletarian worldview offered an alternative to the bourgeois worldview.

In later decades, however, the same worldview became an instrument of domination and repression within parties. That history has to be criticized so that it is not repeated in present political practice.

Our second task is to reconstruct political Marx with the same care that we bring to Capital. My work has concentrated on Marx’s economic writings and on the development of his concept of capital from the Grundrisse to Capital. That focus does not mean that I ignore his political work; no one can investigate every necessary subject simultaneously.

My biographical project is not a biography in the narrow sense of recounting Marx’s life and adventures. It is also a history of the development of his work. Political Marx is central to it, and that political thought appears not only in famous texts such as The Eighteenth Brumaire and The Civil War in France. It also appears in hundreds of newspaper articles in which Marx addressed immediate events while retaining a broader analytical perspective. Political Marx has not yet been fully discovered. Later debates about the state illuminate only part of this extensive body of writing, and I hope to draw more attention to neglected texts.

Class Unity: One way of avoiding both dogmatism and the loss of revolutionary politics may be to restore Marx to his historical context. “Critique” in the nineteenth-century philosophical tradition did not mean merely finding fault; it meant uncovering a discourse’s assumptions and limits. Reading the critique of political economy alongside earlier philosophical critiques helps show that Marx was not simply another economist. Historical reconstruction can also distinguish dialectical materialism from metaphysical materialism and remind us that revolutionary thinkers read philosophy for practical purposes. Is it good advice to historicize Marx in this way while insisting on his continuing relevance?

Michael Heinrich: I agree. It is sometimes said that Marx belongs to the nineteenth century, as though that observation by itself made him irrelevant. Of course a person born in 1818 and dead in 1883 was a man of the nineteenth century. The more interesting question is what the nineteenth century has to do with our present.

That was the period in which capitalism established itself as the dominant mode of production and the basic structures of the bourgeois state took shape. Marx observed those processes. Superficial forms have changed, but the fundamental structures of capitalist production and the bourgeois state remain. In that respect, calling Marx a nineteenth-century thinker is a recommendation rather than a dismissal.

We should nevertheless emphasize that all of Marx’s writings, including those that appear most theoretical, intervened in particular debates and political conflicts. They were not timeless contributions to an eternal discourse about politics or truth. Worldview Marxism tends to turn concrete interventions into eternal propositions. Because historical knowledge is often weak today, readers do not immediately recognize the controversies in which Marx was intervening. We must reconstruct those contexts.

That is one purpose of my biography: to place Marx in history, not to consign him to historians, but to show how the conflicts of his time remain connected to present conditions. In that sense, Marx is a remarkably contemporary figure.

Class Unity: Marx also repeatedly revised his own judgments. His view of the possibilities for revolution in Russia changed after he engaged with Russian revolutionaries, for example. That willingness to learn seems to offer a practical lesson in how to respond critically to circumstances that depart from earlier predictions.

Michael Heinrich: Yes. Marx was a lifelong learner. In his late fifties, he learned Russian in order to read economic literature in the language. Many of his manuscripts were unpublished during his lifetime. Sometimes he could not find a publisher, but often he withheld them because his thinking had changed and he believed the text required revision.

That fact also has consequences for our reading. We should not pick whatever we like from manuscripts written at different moments. We must follow the development of Marx’s arguments and ask what happened later to any claim we take from an earlier text. This is difficult, but it is necessary.

Class Unity: Political organizations need an account of the world in which they operate. Even if Capital is not merely a positive theory, careful interpretation ought to yield knowledge about capitalism, including the necessary role of money and the financial dimension of capital. Not everyone can undertake the scholarship that Marx’s writings require. How can a political organization develop an accessible explanatory framework without flattening the critique of political economy?

Michael Heinrich: I do not see a large contradiction between political education and rigorous scientific study. I could not have written my short introduction immediately after an intensive reading of Capital. In 1980, I completed a manuscript of about two hundred pages that was intended as a commentary. I did not publish it because finishing it showed me how many misunderstandings and shortcomings remained in my own account. The exercise became a method for taking another step.

Many years later, I could write the introduction only after completing The Science of Value, a much longer and more meticulous study of the development of Marx’s economic theory. Serious research is required if one wants to present the basics simply without sacrificing too much complexity.

The resulting introduction is an offer. Some people want basic knowledge: What is capitalism? How does it work? Is crisis an accident that correct policy can prevent, or is crisis necessarily connected to capitalism? We can give reasonably concise and understandable answers. But the critical dimension must remain even at the most elementary level. An explanation of value must also explain why value in a capitalist society requires criticism.

People engaged in political education need more than the most basic material, while those conducting empirical research need more again. I imagine this not as a break between science and popular presentation but as a staircase extending from introductory knowledge to advanced scientific debate. Everyone can decide where to stand. Many who initially want only a basic account become interested and climb higher. Those of us who have spent many years studying Marx should provide tools that help them do so.

Class Unity: Your introduction argues that traditional Marxists often misread Marx’s value theory as a substantialist or premonetary theory similar to those of earlier political economists. You instead call it a monetary theory of value. What is the fundamental mistake in the traditional interpretation, and how should it be corrected?

Michael Heinrich: Marx’s own critique of Ricardo gives the answer. Marx thought highly of Ricardo, but argued that Ricardo understood the connection between labor and value without understanding why the labor represented in commodities must express itself in money. Marx did not use the terms “monetary” and “premonetary” theory, but taking this criticism seriously leads to the core of what I call the monetary theory of value.

It is only a first step to say that commodities are produced by human labor, that concrete labor must be distinguished from abstract labor, and that value depends not on labor individually expended but on socially necessary labor time. Those propositions appear in the first subsection of chapter one. Marx then proceeds to the analysis of the value form in the third subsection. Value must acquire a general form of expression, and that analysis establishes the necessity and importance of money.

For decades, Marx’s value-form analysis was almost entirely ignored. As a consequence, most Marxists treated money much as Smith or Ricardo had treated it. Yet their treatment of money was at the center of Marx’s criticism. The monetary expression of value is not an optional addition to a labor substance that already exists independently of exchange.

Class Unity: Should Capital be read as a scientific work? And should the social sciences be approached differently from the natural sciences?

Michael Heinrich: Capital should certainly be read as a scientific work. Marx held science in very high regard. In his critique of Malthus, he condemned the subordination of science to external purposes as the conduct of a mean person. At the end of the preface to volume one, he welcomed every judgment of scientific criticism. I think he meant that seriously rather than arrogantly challenging readers to find an error. He wanted scientific discussion and criticism.

At the same time, Capital was not written as a contribution to the eternal wisdom of humankind. Shortly after finishing volume one, Marx told an old friend that the book was the strongest missile ever launched against capitalists and landowners. He regarded it as a political weapon precisely because it was scientific, not in spite of its scientific character. We must both read it scientifically and discuss its political consequences.

At a very general level, the social and natural sciences alike require strict standards. In science there is a difference between an opinion and a justified judgment. But scientific character does not guarantee absolute truth. This is more readily admitted in the social sciences, yet the history of natural science shows the same point. Newtonian physics appeared definitive for two centuries before relativity and quantum mechanics transformed the field. Scientific revolutions occur in both natural and social inquiry, and during such revolutions the criteria of science and proof can change. Those changes are social as well as scientific. There are many differences between the fields, but also important parallels.

Class Unity: A common objection is that an economic analysis written more than a century and a half ago cannot explain the present. Yet finance is central to the later volumes of Capital. Can Marx’s theory help us understand a crisis such as that of 2008, or must we introduce fundamentally different principles?

Michael Heinrich: Both Marx’s analysis and additional principles are required. We must first ask what the object of Capital actually is. If it were British capitalism in the middle of the nineteenth century, it would now be primarily a book for historians. But Marx’s object was what he once called the capitalist mode of production in its “ideal average.”

He wanted to analyze what necessarily belongs to capitalism, not merely its specific historical shape in one country. The preface makes a similar point: the book does not present a higher or lower degree of capitalist development but the laws underlying that development. Marx drew most of his examples from England because it was then the most advanced capitalist country, but he described them as illustrations of his theoretical argument.

This high level of abstraction has advantages and disadvantages. The advantage is that Capital remains usable because we still live in capitalism and its basic structures continue to operate beneath changed surface forms. That is true insofar as Marx succeeded in presenting the ideal average. The disadvantage is that the book is not an analysis of a complete, concrete capitalist economy. Even during Marx’s lifetime, an investigation of a particular English crisis would have required more than Capital. Concrete analysis always requires more, but the additional work can be grounded in Marx’s categories.

For a financial crisis, we can use Marx’s accounts of interest as part of gross profit and of fictitious capital as distinct from industrial capital. Yet the material on finance and credit is incomplete, quantitatively and qualitatively. Throughout the three volumes, Marx assumes that a money commodity is necessary to capitalism. He clearly recognized the problems that commodity money created but believed it could not be abolished.

Here his analysis did not achieve the ideal average. He mistook a particular historical form for a necessary feature. The twentieth century demonstrated that the money commodity could be abolished. Today’s currencies do not depend on commodity money. During Marx’s lifetime, national banks such as the Bank of England were only beginning to become what we now call central banks, whose central function is the issue of noncommodity money.

We therefore have to go beyond Marx at the categorical level by incorporating modern central banks and their functions. To analyze 2008 concretely, we must also investigate the world currency system of that year, which differed greatly from the Bretton Woods system. Considerable empirical and theoretical work must be added, but it should build on the analysis in Capital.

Class Unity: Does the monetary theory of value also dissolve the so-called transformation problem? If value is not the kind of independent quantitative substance imagined by earlier political economy, perhaps the apparent need to transform one system of values into another system of prices arises from a category mistake.

Michael Heinrich: I agree in part, perhaps completely, but something must be added. A transformation problem really does appear in volume three. Marx argues that if each capital received the surplus value produced by that particular capital, different branches would have different profit rates. Capital moves toward the highest profit regardless of the branch, so competition creates a tendency toward equal profit rates. Once profit rates are equalized, market prices no longer oscillate around values. Their centers of gravity are prices of production, which diverge from values. The question is how values relate to prices of production.

Marx illustrates the relation numerically, transforming outputs but not inputs. That cannot be consistent: if all outputs are sold at prices of production, the inputs purchased by other producers cannot enter at values. Marx recognized that an error might occur here, but treated it as a minor detail. Later debate showed that it is not easy to resolve.

In The Science of Value, I argue that the transformation problem can be avoided if we stop treating it as a quantitative conversion. It concerns the transformation of categories, a qualitative rather than quantitative movement. Marx’s manuscript nevertheless treats it quantitatively. I interpret this as one of the ambivalences in Capital. Marx broke fundamentally with the theoretical field of classical political economy, but in carrying out that scientific revolution he remained attached to some of the concepts he had already surpassed. Such ambivalence is common in scientific revolutions.

We should identify and remove these remnants—in other words, criticize Marx with the help of Marx. If we treat the transformation as qualitative, we cannot speak of values as a second quantitative system existing alongside production prices. Value is a step in constructing the concepts of the capitalist mode of production, not a separately measurable system awaiting a mathematical algorithm that converts it into another system. Many Marxists reject this conclusion because they want a quantitative value theory, but we cannot always get what we want.

Class Unity: Let us press this point further. If abstract labor arises only when the products of concrete labor are exchanged as commodities through money, then abstract labor cannot predetermine exchange values as a quantity existing prior to circulation. Marx is criticizing the assumptions of his predecessors while also explaining positively how social labor is constituted in capitalism. Does this show that the critique of political economy supplies an explanatory account rather than merely negating earlier theories?

Michael Heinrich: The relation between critique and a positive account depends on what we mean by critique. Marx’s concept has much in common with Kant’s. The parallel between the Critique of Pure Reason and the critique of political economy is visible even in the wording.

Critique in this sense is not confined to proving that someone has made an ordinary error, although Marx enjoyed finding mistakes in famous economists. Its main purpose is more fundamental: it shows that an argument rests on assumptions that remain obscure to its author and audience. The argument may be formally logical, but the unexamined assumptions shape all its consequences.

Such criticism necessarily says something substantive about its object. The critique of metaphysics did not merely announce that existing metaphysicians were wrong; by criticizing their assumptions, it opened a new account of human cognition and reformulated questions that had previously been treated as knowledge of the soul or God. Likewise, Marx’s critique opens a new field for understanding capitalist society. I see no contradiction, or even a contrast, between critique in this sense and what you call a positive account.

I avoid the phrase “positive science” because it can suggest a narrow positivist empiricism in which one collects data, combines them, and imagines the problem solved. That was not Marx’s conception of science. There is also an opposing tradition, influential in Germany, according to which any analytical or affirmative claim is already a betrayal of critique. I try to avoid both extremes. To say that Marx analyzes the capitalist mode of production plainly means more than saying that he proved certain economists wrong.

Class Unity: Does your interpretation of Marx support any particular political program? Keynesian economics is commonly associated with policies that sustain aggregate demand, while neoclassical economics is used to justify austerity or wage reductions. What political measures, if any, follow from the analysis in Capital?

Michael Heinrich: The first question is what the political program is intended to achieve. During a capitalist crisis marked by unemployment and lost income, one objective may be to minimize the harm. We can then compare policies according to that aim. Austerity usually intensifies the effects of crisis, while Keynesian measures usually reduce them.

If the objective is to overcome capitalism, however, no single economic policy supplies the answer. We must distinguish measures that alleviate problems within capitalism from steps that move beyond it. Some people say there is only revolution or nothing. I think there is more political space than that opposition allows.

Berlin offers an instructive example. Rents have risen enormously during the past decade. Even a well-paid middle-class family can struggle to find an appropriate apartment. A citizens’ initiative proposed expropriating the apartments of large housing corporations—those holding more than three thousand units—and placing them in a public trust. This would not be ordinary state ownership. Tenants and representatives of the city’s wider population would administer the housing so that the benefits were shared beyond the immediate residents.

After years of organizing, the initiative won a 2021 referendum. Fifty-seven percent voted in favor with turnout of roughly seventy-four percent. Most political parties opposed the proposal and have tried to obstruct it, so I doubt whether it will be implemented. Nevertheless, it illustrates a step beyond capitalism. A significant sphere of economic life would be removed from profit-oriented organization and placed under self-administration, with revenues covering costs rather than generating returns.

Such a measure could also create a new political practice. If people learn to administer housing collectively, they may attempt something similar in other sectors. I do not imagine that adding sectors one by one will suddenly abolish capitalism; the transition is more complicated. But this project moves farther beyond capitalism than a Keynesian response to recession.

Class Unity: Some interpretations treat Marx as a technological determinist: changes in the productive forces drive changes in social relations and institutions. Is that an accurate account?

Michael Heinrich: No. It may accurately describe some Marxist authors, and a short passage in Marx’s 1859 preface can be read that way if it is isolated. That passage sketches an economic basis and an institutional superstructure, with developing productive forces eventually producing a change in the relations of production. But it occupies only a page and a half in a preface written for a specific purpose. It should not be treated as Marx’s comprehensive theory of history.

In Capital, technology always appears within a social context. Marx distinguishes material content from social form. Every society has labor products as material contents, but only particular societies give them the social form of commodities. He likewise introduces technology primarily in his analysis of the production of relative surplus value. Technological development is not an independent factor that mechanically determines society; it is socially determined. The analysis in Capital therefore does not support technological determinism.

Class Unity: A central concern for Class Unity is the condition of the contemporary left and what we see as its retreat from class and labor issues. Does a principled left remain in German politics or internationally, and does worldview Marxism still influence it?

Michael Heinrich: I cannot judge the left throughout the world. I know Germany, parts of Europe, and something of several Latin American countries, but I must not pretend to know every national situation. The left is probably fragmented nearly everywhere—fragmented in its political ideas, strategies, and social bases.

Worldview Marxism still matters in some small groups that try to reproduce historical party forms. They imitate traditional socialist or communist organizations without taking account of the very different political context. Some groups define themselves as revolutionary and mainly criticize others for being insufficiently revolutionary. Others conclude that revolution was a dead end and imagine overcoming capitalism through a continuous sequence of reforms.

I read Class Unity’s statement criticizing identity politics, and I largely agree with its emphasis on the working class and the need for political education. But its tone gave me the impression that the working class sometimes appears as an object to be treated: the organization possesses knowledge that it must bring to workers and propositions of which it must convince them. That establishes Class Unity on one side and the working class on the other.

The working class is not a uniform entity. Its composition changes over time, and it is divided along many lines. In Germany, large parts of the working class now have higher education, and many academics are workers. It is too simple to contrast a university culture that produces strange ideas with an entirely separate culture of workers and trade unions. These are not sealed worlds.

The working class in Germany, and presumably in the United States, also contains a strong right wing. A considerable share of support for the extreme right comes from workers. Leftists are in political opposition to those workers. We therefore cannot speak of the working class as a ready-made unity whose interests and consciousness are immediately given.

Political education must be reciprocal. When I conduct workshops with trade unionists on Marx or economic policy, participants can learn something from me. But I learn from them about concrete working conditions, conflicts within companies, and how workers understand and handle those conflicts. The scholar who has read many books should not arrive simply to announce what capitalism is, why it must be abolished, and why workers are assigned the task of abolishing it.

We need a common process of learning and acting. Participants bring different abilities and kinds of knowledge, and the task is to combine them productively rather than dividing the room between teachers and those who supposedly need instruction. Academic and working-class cultures are themselves changing and overlapping. As Marx famously wrote, all that is solid melts into air. The observation applies to the working class and to our relationship with it.

Class Unity: That is an important difficulty for us: how to avoid pedantry while speaking with people about real conditions. As a final question on German politics, how do you assess the recent departure of Sahra Wagenknecht from the established left party and the formation of a new party around her leadership?

Michael Heinrich: She spent many years in the established left party. She began with a very simplified form of worldview Marxism, but gradually replaced Marx with a postwar German conservative politician associated with the “social market economy”—a very effective name for disguising capitalism.

She later developed a destructive critique of her own party. Criticizing that party is not itself a problem; I criticize it frequently. But she published a book shortly before the 2021 national election that undermined the organization while she remained one of its members of parliament and used that position to gain prominence in talk shows and public debates.

She has now left and founded a party bearing her own name. Its program rejects the distinction between left and right as old-fashioned and does not claim to constitute a new left. I therefore no longer consider her part of the German left. Her position combines conservative nationalism with a social-welfare orientation. It is not neoliberalism and does not seek a minimal welfare state. But the welfare state is to rest on the success of German firms in world markets and on Germany prevailing in international competition. That national-competitive project has nothing to do with the left, even if one defines the left very broadly.

Class Unity: Thank you, Michael Heinrich. This has been an excellent discussion.

Michael Heinrich: Thank you.